SteelMint: Odisha iron ore fines index rises INR 350/t; market waiting for OMC auction

SteelMint’s weekly Odisha iron ore fines index (Fe 62%) increased by around INR 350/t w-o-w to INR 3,600/t ex-mines. Monsoons have resulted in limited merchant miners offering material this week, which has lent support to prices.

On the other hand, market participants are eagerly waiting for the upcoming OMC auction scheduled next week for 2.41 mnt of material. The State PSU miner has scheduled the iron ore auction for 19 August. Around 1.005 mnt of lump ore and 1.406 mnt of iron ore fines will go under the hammer. The base price of the auction is yet to be disclosed.

Recent deals:

As per sources, one deal of around 20,000 t iron ore fines (Fe 62%) was concluded at INR 3,800/t ex-mines this week. However, it was not taken into consideration for index calculation as it was not confirmed either by the buyer or seller at the time of publication.

JSW Steel had scheduled an auction for 252,800 tonnes of iron ore fines (Fe 61-62%) for 10 August from its Nuagaon mines in Odisha. As per sources, the company received bids for the entire material at INR 2,750-2,760/WMT ex-mines, including royalty, DMF and NMET.

Rationale:

• T1- One deal was reported but not confirmed for high grade ore (Fe 62%) and hence not considered for index calculation. Therefore, 0% weightage was given in this week.
• T2- SteelMint received eight (08) offers and indicative prices under T2 trade deals in this publishing window out of which six (06) were taken into consideration and given 100% weightage. To check SteelMint’s iron ore assessment, pricing methodology and specification documents Click here.

Odisha iron ore prices

Highlights from other states:

• NMDC raises prices after four consecutive cuts since April: NMDC has raised iron ore prices by up to INR 240/tonne (t) for August deliveries, SteelMint learnt from credible sources. The company has raised prices of lump ore by up to INR 200-240/t and fines by INR 100/t, effective from 11 August. Notably, this is the first hike seen after four price cuts seen since April.
• NMDC raises base prices for Karnataka e-auction: NMDC has increased base prices for iron ore fines by up to INR 105/t and for lumps by up to INR 200/t for today’s auction from the Donimalai mines in Karnataka. The floor price of Fe 62% fines is INR 2,215/t, while Fe 63% fines price is at INR 2,312/t (basic, excluding royalty). The base price of lump (Fe 64%) stands at INR 2,854/t (basic, excluding royalty).